Food Stamp Program: Non-Discretionary Provisions of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996

DEPARTMENT OF AGRICULTURE

Food and Nutrition Service

7 CFR Chapter II, Subchapter C, and Parts 271, 273 and 276

RIN 0584-AC41

Food Stamp Program: Non-Discretionary Provisions of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996

AGENCY: Food and Nutrition Service, USDA.

ACTION: Proposed rule.

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SUMMARY: On August 22, 1996, the President signed the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996. This

rule proposes to amend the Food Stamp Program Regulations to implement

the non-discretionary provisions of this law which affect the Food

Stamp Program. These provisions concern changes in the minimum and

maximum allotments, the standard and shelter deductions, household

composition, the fair market value of vehicles, the definition of

homeless, and expedited service. This rule also incorporates, where

possible, the principles of the President's Regulatory Reform

Initiative and removes overly prescriptive, outdated, and redundant

provisions and increases State agency flexibility.

DATES: Comments on this proposed rulemaking must be received on or

before September 10, 1999 to be assured of consideration.

ADDRESSES: Comments should be submitted to Margaret Werts Batko,

Certification Policy Branch, Program Development Division, Food and

Nutrition Service, USDA, 3101 Park Center Drive, Alexandria, Virginia,

22302. Comments may also be faxed to the attention of Ms. Batko at

(703) 305-2486 or e-mailed to [email protected] All written

comments will be open for public inspection at the office of the Food

and Nutrition Service during regular business hours (8:30 a.m. to 5

p.m., Monday through Friday) at 3101 Park Center Drive, Alexandria,

Virginia, Room 720.

FOR FURTHER INFORMATION CONTACT: Questions regarding this proposed

rulemaking should be addressed to Ms. Batko at the above address or by

telephone at (703) 305-2516.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be Economically Significant under

E.O. 12866, and Major under P.L. 104-121, and has therefore been

reviewed by the Office of Management and Budget.

Executive Order 12372

The Food Stamp Program is listed in the Catalog of Federal Domestic

Assistance under No. 10.551. For the reasons set forth in the final

rule in 7 CFR Part 3015, Subpart V and related Notice (48 FR 29115,

June 24, 1983), this Program is excluded from the scope of Executive

Order 12372 which requires intergovernmental consultation with State

and local officials.

Regulatory Flexibility Act

This rule has been reviewed with regard to the requirements of the

Regulatory Flexibility Act of 1980 (5 U.S.C. 601-612). Shirley R.

Watkins, Under Secretary for Food, Nutrition, and Nutrition Services,

has certified that this rule will not have a significant economic

impact on a substantial number of small entities. State and local

welfare agencies will be the most affected to the extent that they

administer the Program. Participants will be affected to the extent

that their benefits will not increase at the rate they would have under

the old law.

Paperwork Reduction Act

This proposed rule does not contain reporting or recordkeeping

requirements subject to approval by the Office of Management and Budget

(OMB) under the Paperwork Reduction Act of 1980 (44 U.S.C. 3507).

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil

Justice Reform. This rule is intended to have preemptive effect with

respect to any State or local laws, regulations or policies that

conflict with its provisions or that would otherwise impede its full

implementation. This rule is not intended to have retroactive effect

unless so specified in the ``Effective Date'' paragraph of the final

rule. Prior to any judicial challenge to the provisions of this rule or

the application of its provisions, all applicable administrative

procedures must be exhausted. In the Food Stamp Program the

administrative procedures are as follows: (1) For Program benefit

recipients--State administrative procedures issued pursuant to 7 U.S.C.

2020(e)(1) and 7 CFR 273.15; (2) for State agencies--administrative

procedures issued pursuant to 7 U.S.C. 2023 set out at 7 CFR 276.7 (for

rules related to non-quality control (QC) liabilities) or Part 283 (for

rules related to QC liabilities); (3) for retailers and wholesalers--

administrative procedures issued pursuant to 7 U.S.C. 2023 set out at 7

CFR 278.8 and Part 279.

Regulatory Impact Analysis

Need for Action

This action is needed to implement 8 provisions of the Personal

Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L.

104-193. This rule proposes to remove the exception in current law that

allows persons age 21 and under who are themselves parents or married,

and who live with a parent, to participate in the Food Stamp Program as

a separate household; change the way the maximum allotments are

calculated by using 100% of the Thrifty Food Plan instead of 103%;

alter the definition of homeless by setting a time limit (where there

was none before) on people whose primary nighttime residence is a

temporary accommodation in the home of another; freeze the standard

deduction in food stamps for fiscal year 1997 and beyond at $134;

retain a cap on the excess shelter expense deduction; freeze the fair

market value of vehicle exemption at $4,650; freeze the minimum

allotment at $10 a month; increase the number of days in which States

have to provide expedited service from 5 to 7 calendar days; eliminate

households consisting entirely of homeless people from those categories

of households entitled to receive expedited service; and remove the

State agency option to exclude from unearned income up to $50 monthly

of title IV-D child support payments.

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Effects on Administering Agencies

State food stamp offices are affected to the extent that they must

implement the provisions described in this action. However, State

agencies are not expected to change their personnel due to these

changes, so State agencies are expected to incur minimal costs.

Costs

The changes in the food stamp requirements made by the provisions

addressed in this rule would reduce Food Stamp Program costs for FY

1998 by approximately $1,930 million.

Definitions--7 CFR 271.2

Definition of Homeless: Current regulations at 7 CFR 271.2 define a

homeless individual as an individual lacking a fixed or regular

nighttime residence or whose primary nighttime residence is a shelter,

a residence intended for those to be institutionalized, a temporary

accommodation in the residence of another, or a public or private place

not designed to be a regular sleeping accommodation for humans. The

Food Stamp Act of 1977, as amended (7 U.S.C. 2011-2032) (the Act), did

not place a time limit on what constitutes a temporary accommodation in

the residence of another.

Section 805 of the Personal Responsibility and Work Opportunity

Reconciliation Act (PRWORA) of 1996 amends section 3(s)(2)(C) of the

Act by setting a time limit for people whose primary nighttime

residence is a temporary accommodation in the home of another. These

people will only be considered homeless if the temporary accommodation

is for not more than 90 days. This rule proposes to amend 7 CFR 271.2

accordingly.

Definition of Minimum Benefit: Prior to the PRWORA, section 8(a) of

the Act provided that the minimum benefit for one- and two-person

households shall be $10 per month, and shall be adjusted to the nearest

$5 each October 1 based upon the percentage change in the Thrifty Food

Plan for the twelve-month period ending the preceding June.

The current regulations at 7 CFR 271.2 define minimum benefit as

the minimum monthly amount of food stamps that one- and two-person

households received. Section 271.2 also provides that the amount of the

minimum benefit will be reviewed annually and adjusted to the nearest

$5 each October 1 based on the percentage change in the Thrifty Food

Plan for the twelve-month period ending the preceding June.

Section 826 of the PRWORA amends section 8(a) of the Act by

removing the annual adjustment provision, thus freezing the minimum

benefit at $10. This rule proposes to amend 7 CFR 271.2 accordingly.

Household Concept--7 CFR 273.1

7 CFR 273.1(a)(2)--Special Definition--Treatment of Children Living

at Home: Section 3(i)(2) of the Act provides specific definitions for

what constitutes a household when a child is living with his or her

parents. The Mickey Leland Childhood Hunger Relief Act, Title XIII,

Chapter 3 of the Omnibus Budget Reconciliation Act of 1993, Pub. L.

103-66 (Leland Act), amended section 3(i) of the Act with the intention

of simplifying the household definition provisions and supporting

families that live together and share housing expenses but who do not

necessarily purchase and prepare meals together. With certain

enumerated exceptions, the simplified household definition allowed

persons who live together and who purchase food and prepare meals

separately to participate in the Program as separate food stamp

households. Specifically, it provided that a child under 22 years of

age who is living with his or her natural or adoptive parent or

stepparent, is presumed to purchase and prepare meals together with the

parent even if he does not, unless the child is also living with his or

her own child(ren) or spouse. The ``Certification Provisions of the

Mickey Leland Childhood Hunger Relief Act'' rule published October 17,

1996 (61 FR 54279), amended 7 CFR 273.1 accordingly. Currently, 7 CFR

273.1(a)(2)(B) provides that a child under 22 years of age who is

living with his or her natural or adoptive parents or stepparents, is

considered to be purchasing and preparing meals with his or her

parents, unless the child is also living with his or her own child(ren)

or spouse.

Section 803 of the PRWORA amended section 3(i) of the Act by

eliminating this exception to the household definition. This rule

proposes to make a corresponding change to the regulations at 7 CFR

273.1 to provide that a child under 22 years of age who is living with

his or her natural or adoptive parents or stepparents is considered to

be purchasing and preparing meals with his or her parents and,

therefore, is part of the parents' household.

Definition of Parental Control: To provide the same treatment for a

child living with a non-parent adult that is provided for a child

living with a natural or adoptive parent or stepparent, the Department

is proposing to change the definition of parental control. This rule

proposes to amend 7 CFR 273.1 by removing the exception that a child

who is living with his or her own child(ren) or spouse is not

considered to be under parental control.

Reorganization of 7 CFR 273.1--Household Concept: In the spirit of

the President's Regulatory Reform Initiative, we are proposing to

reorganize section 273.1, with the exception of 7 CFR 273.1(d) and (f),

which remain unchanged. We are not proposing significant changes to

section 273.1 as nearly every provision is set forth in the Act and can

be changed only through legislative action. However, we are condensing

several sections into a single section; removing unnecessary verbiage

and provisions covered elsewhere in the regulations; and providing

State agency flexibility where possible. This proposed rule sets out

the entire revised text for the convenience of the reader. The specific

changes are detailed in the following paragraphs of this section of

preamble.

Eligibility for the Food Stamp Program is based on a ``household''

concept. Current regulations at 7 CFR 273.1(a)(1) define what

constitutes a ``household'' for Food Stamp Program purposes. Generally,

a household means an individual living alone or group of individuals

living together and purchasing food and preparing meals in common.

There are exceptions to this general household concept policy for

certain types of living arrangements which are set forth in 7 CFR

273.1(a)(2), (b), (c), and (e).

This rule proposes to combine the current provisions at 7 CFR

273.1(a)(2), (b), (c)(1), (c)(3), and (e) governing the inclusion or

exclusion from a household of certain individuals living with others in

a single section designated as paragraph (b). These individuals include

spouses, children, elderly and disabled persons, roomers, live-in

attendants, boarders, residents of institutions, and other individuals

who share living quarters with the household but who do not customarily

purchase food and prepare meals with the household. There has been

confusion in the past as to when such individuals are included or

excluded as household members. We believe including the provisions in

separate paragraphs under a single regulatory section rather than

addressing each inclusion/exclusion provision in a separate regulatory

section will help to clarify the household concept.

Furthermore, this rule would remove the definition of ``spouse'' at

7 CFR 271.2. Most States have laws governing who is considered a

spouse. Allowing State agencies to use a State definition of spouse

provides flexibility while

[[Page 37456]]

ensuring a uniform policy throughout the State.

To ensure uniformity among all States, we are proposing to retain

in new paragraph (b)(3) the language currently appearing in 7 CFR

273.1(c)(1) which defines a boarder. Boarders are individuals or groups

of individuals residing with others and paying reasonable compensation

to the others for meals or meals and lodging. Persons paying less than

reasonable compensation for meals are not boarders and, thus, are

required to be members of the household providing the services. We are

also proposing to retain the language appearing in current rules at 7

CFR 273.1(c)(3)(i) and (ii) that provides that an individual qualifies

as a boarder paying reasonable compensation for board when the board

payment is for more than two meals a day for which the individual pays

an amount equal to or in excess of the maximum food stamp allotment for

the appropriate size of the boarder household, or is for less than two

meals a day and the individual pays an amount equal to or in excess of

two-thirds of the maximum food stamp allotment for the appropriate size

of the boarder household.

We contemplated removing these computation provisions from the

rules and allowing State agencies the flexibility to establish a means

for computing reasonable compensation. This computation method has been

in existence since 1982. Upon researching our files, we found no

evidence that these provisions have been a problem for the State

agencies or clients. This is not an area of the Program where State

agencies have specifically asked for flexibility. We believe the

provision as written is simple to administer, equitable to clients, and

adaptable to each State's automated certification system. However, we

specifically solicit comments from interested parties on this matter.

With the proposed combining of 7 CFR 273.1(a)(2), (b), (c)(1),

(c)(3), and (e) in new paragraph (b), 7 CFR 273.1(c) of current

regulations would be eliminated. We are adding a new paragraph (c).

There has been some confusion by State agencies as to when the policy

on ``purchasing food and preparing meals'' overrides policy prohibiting

the separation of spouses and children, or prohibiting the

participation of boarders. In the new paragraph (c) we would

specifically allow State agencies to apply discretion when the rule

does not lend itself to a simple and direct answer to certain living

situations. We cannot cover all living situations by regulation. We

intend that State agencies use prudent judgment in determining when to

allow individuals to be certified as separate households from others

with whom they reside and to protect Program integrity by not allowing

great numbers of households to fragment into smaller households. The

language also clarifies that any State policy adopted under this

provision must be applied consistently throughout the State.

This rule proposes to remove the language currently appearing at 7

CFR 273.1(c)(2) and (c)(4). The provision at 7 CFR 273.1(c)(2) reminds

the State agency that the household with whom the boarder resides can

participate in the Program if otherwise eligible. The provision at 7

CFR 273.1(c)(4) reminds the State agency that an individual furnished

both meals and lodging and paying less than reasonable compensation for

these services is not a boarder, but is a member of the household

providing the services pursuant to 7 CFR 273.1(a). We consider these

two provisions to be redundant.

We are not proposing any changes in 7 CFR 273.1(d) Head of

Household, and (f) Authorized Representative because we believe the

current regulations are appropriate. Requirements in current

regulations at 7 CFR 273.1(g) for determining the eligibility and

benefits of households containing members on strike are redesignated as

paragraph (e), with minor editorial changes for clarity.

Application Processing--7 CFR 273.2

Expedited Service: Current regulations at 7 CFR 273.2(i) provide

for expedited service to migrant or seasonal farm workers who are

destitute and households with less than $150 in combined monthly gross

income. Both of these types of households must also have liquid

resources of $100 or less to qualify for expedited service. Households

in which all members are homeless individuals and eligible households

whose combined monthly gross income and liquid resources are less than

the household's monthly rent or mortgage and utilities are also

eligible to receive expedited service. Prior to the PRWORA, section

11(e)(9) of the Act required that benefits be provided not later than

five calendar days following a household's date of application for all

eligible households.

Section 838 of the PRWORA amends section 11(e)(9) of the Act by

increasing the amount of days in which States have to provide expedited

service from five to seven calendar days, and eliminating households

consisting entirely of homeless people from those categories of

households entitled to receive expedited service.

Accordingly, this rule proposes to amend 7 CFR 273.2(i)(3)(i) by

striking ``fifth'' calendar day and inserting ``seventh''. This rule

also would amend 7 CFR 273.2(i)(3)(ii) by striking ``5 calendar days''

and inserting ``7 calendar days.'' In addition, the rule would remove 7

CFR 273.2(i)(1)(iii) which provides that households in which all

members are homeless individuals are entitled to expedited service and

redesignates 2(i)(1)(iv) as 2(i)(1)(iii). Homeless individuals may

continue to qualify for expedited service under the financial criteria.

Resource Eligibility Standards--7 CFR 273.8

Fair Market Value: The Leland Act amended section 5(g) of the Act

to provide that on October 1, 1996, and each October 1 thereafter, the

fair market value resource exclusion limit for licensed vehicles shall

be adjusted, using a base of $5,000, to reflect changes in the new car

component of the Consumer Price Index for All Urban Consumers (CPI-U)

published by the Bureau of Labor Statistics for the 12-month period

ending on June 30 preceding the date of such adjustment and rounded to

the nearest $50. The ``Certification Provisions of the Mickey Leland

Hunger Relief Act'' rule, published October 17, 1996 (61 FR 54279),

amended 7 CFR 273.8(h)(3) accordingly.

Section 810 of the PRWORA amended section 5(g) of the Act to

provide that any licensed vehicle that is used for household

transportation or to obtain or continue employment to the extent that

the fair market value of the vehicle exceeds $4,600 through September

30, 1996, and $4,650 beginning October 1, 1996 shall be included in

financial resources. Section 810 also freezes the fair market value

exclusion limit used in determining the countable value of the included

vehicle at $4,650. Accordingly, this rule proposes to amend 7 CFR 273.8

to include the new resource exclusion level which is effective October

1, 1996.

We are proposing to modify the definition in 7 CFR 273.8(c)(i)(C)

of a vehicle that can be excluded from a household's assets because it

is used for income-producing purposes to include vehicles needed for

performing a job, although they may also be used for commuting and for

normal household errands. Examples would be a car used for a job as a

delivery person, a motor vehicle used by a courier, a car used by a

household member to call on customers, even though the vehicle is not

used for long-distance travel, or any vehicle used to perform a job

that was advertised as requiring a personally-

[[Page 37457]]

owned motor vehicle. This will ensure that State agencies will not have

to verify the relative amount of mileage traveled for income-producing

purposes. Accordingly, this rule proposes to amend 7 CFR 273.8 to

remove the requirement that a vehicle used for income-producing

purposes be used primarily for those purposes in order to be excluded

from a household's assets. FNS is seeking comments on the effect this

proposal will have on State agencies and on food stamp applicants and

recipients.

Reorganization of 7 CFR 273.8: We are taking this opportunity to

propose a reorganization of 7 CFR 273.8 and the removal of redundant or

unnecessary verbiage.

Section 5(g)(2) of the Act requires that the Secretary prescribe

inclusions and exclusions from financial resources following the

regulations in force as of June 1, 1982. The law provided an exception

for the provisions governing vehicles and inaccessible resources. All

other resource inclusion and exclusion provisions described in the

regulations as of June 1, 1982 became law by reference and can only be

changed through legislative action. Nonetheless, there are some

provisions we are able to change and some areas where we can remove

redundant or unnecessary verbiage. Those provisions relate to the fair

market value test for vehicles, inaccessible resources, and the

transfer of resources. This rule would revise 7 CFR 273.8(e), (g), (h),

(i) and remove (j).

Currently, paragraph (e)(3) provides that licensed vehicles shall

be excluded from resources pursuant to the current provisions under

paragraph (h). A list of vehicles excluded from resources without

regard to the fair market value or equity value of the vehicle appears

in paragraphs (h)(1) and (h)(2). Paragraphs (h)(3) through (h)(6) state

that vehicles not excluded under paragraphs (h)(1) or (h)(2) must be

evaluated for their fair market value and/or equity value to determine

what portion of the value of the vehicle would be counted as a

resource, unless the vehicle is exempt from such tests. Regulations

governing the determination of the fair market value of a vehicle are

set forth in paragraph (g). We believe that this organization is

confusing and difficult to follow.

This rule proposes to remove all the provisions from paragraph (h)

and transfers them to either (e) or (g). The list of vehicles excluded

from resource consideration currently contained in paragraphs

(h)(1)(i)-(v) and (h)(2) are incorporated into 7 CFR 273.8(e)(3). The

remaining provisions of paragraph 5(h)(3), (h)(4) and (h)(5) concerning

the treatment of non-excluded vehicles are rewritten and combined with

the provisions in paragraph (g) to improve readability. As a result of

transferring the text of paragraph (h), that section would no longer

exist and paragraph (i) would be re-designated as paragraph (h). A

conforming amendment would also be made to paragraphs (e)(16) and

(e)(18) to reference the relocation of the vehicle exclusion

provisions. Furthermore, the current 7 CFR 273.8(j), which provides

that the resources of certain non-household members shall be treated in

accordance with 7 CFR 273.11, would be removed. We believe this

reference is unnecessary.

In keeping with the principles of the President's Regulatory Reform

Initiative of increasing State flexibility, this interim rule removes

the proscriptive regulations in paragraph (g) for determining the fair

market value of a vehicle and allows State agencies to establish their

own methodologies. However, to ensure client protection, we are

proposing to retain the prohibition against increasing the basic value

of a vehicle because of low mileage, optional equipment, or special

apparatus for the handicapped as State variations may affect

eligibility and costs.

This proposed rule would also revise paragraph (e)(11) which

excludes from countable resources any resource that is specifically

excluded by any other Federal statute and lists such excluded

resources. This rule proposes to remove the specific list of resources

excluded by other Federal laws. We periodically provide State agencies

with a list of such excluded resources through agency memoranda because

the list changes frequently and quickly becomes outdated. Doing this by

regulations results in incomplete regulations, thereby causing

confusion. We believe it is sufficient to have the regulation simply

provide an exclusion for any resource specifically excluded by another

Federal statute and continue to notify State agencies through agency

memoranda when such laws are enacted.

Income and Deductions--7 CFR 273.9

Standard Deduction: Current regulations at 7 CFR 273.9(d)(7)

provide that effective October 1, 1987, and each October 1 thereafter,

the standard deduction shall be adjusted to reflect change in the CPI-U

for items other than food for the twelve months ending the preceding

June 30. Section 809 of the PRWORA amends section 5(e) of the Act to

provide that the Secretary shall allow a standard deduction for each

household in the 48 contiguous States and the District of Columbia,

Alaska, Hawaii, Guam, and the Virgin Islands of the United States of

$134, $229, $189, $269, and $118, respectively. The annual adjustment

is eliminated. This rule would amend the regulations at 7 CFR

273.9(d)(7) accordingly.

Excess Shelter Expense Deduction: The current regulations at 7 CFR

273.9(d)(5) provide that households are entitled to a deduction from

income for excess shelter expenses that exceed 50 percent of the

household's net income remaining after all other deductions. For

households with an elderly or disabled member (as defined in 7 CFR

271.2), the amount of the deduction is not limited. For other

households, the deduction is limited. This limit, usually referred to

as the ``shelter cap,'' has been changed several times due to

legislation. The current regulations at 7 CFR 273.9(d)(8) were last

updated in 1987 and provide that effective October 1, 1988, and each

October 1 thereafter, the maximum limit for the excess shelter expense

deduction shall be adjusted to reflect changes in the shelter, fuel,

and utilities components of housing costs in the

CPI-U for the 12 months ending the preceding June 30.

The Leland Act amended section 5(e) of the Act to gradually

increase and then remove the limit on the amount of excess shelter

expenses these households could deduct from their income to determine

eligibility and benefits. The Leland Act provided that effective

October 1, 1995 through December 31, 1996, the excess shelter expense

deduction in the 48 contiguous States and the District of Columbia,

Alaska, Hawaii, Guam and the Virgin Islands of the United States, shall

not exceed $247, $429, $353, $300, and $182, respectively, and that the

cap be removed January 1, 1997.

The ``Excess Shelter Expense Limit and Standard Utility

Allowances'' rule, published on November 22, 1994 (59 FR 60098),

proposed to make the corresponding change in the regulations at 7 CFR

273.9(d)(8). This rule has been overtaken by more recent statutory

changes and will not be published in final form.

Section 809 of the PRWORA once again amended section 5(e) of the

Act in regard to the excess shelter limit. Section 809 provides that a

household shall be entitled to an excess shelter expense deduction to

the extent that the monthly amount expended by a household for shelter

exceeds an amount equal to 50 percent of monthly household income after

all other applicable deductions have been allowed. In the case of a

household that does not contain an elderly or disabled individual, in

the 48 contiguous States

[[Page 37458]]

and the District of Columbia, Alaska, Hawaii, Guam and the Virgin

Islands of the United States, the excess shelter expense deduction

shall not exceed:

(i) for the period beginning on the date of enactment of the law

and ending on December 31, 1996, $247, $429, $353, $300, and $182 per

month, respectively;

(ii) for the period beginning on January 1, 1997, and ending on

September 30, 1998, $250, $434, $357, $304, and $184 per month,

respectively;

(iii) for fiscal years 1999 and 2000, $275, $478, $393, $334, and

$203 per month, respectively; and

(iv) for fiscal year 2001 and each subsequent fiscal year, $300,

$521, $429, $364, and $221 per month, respectively.

This proposed rule would make a corresponding change to the

regulations at 7 CFR 273.9(d)(8).

Determining Household Eligibility and Benefit Levels--7 CFR 273.10

Maximum Allotments: As required by section 3(o) of the Act prior to

the PRWORA, the current regulations at 7 CFR 273.10(e)(4)(ii)(F)

provide that effective October 1, 1990 and each October 1 thereafter,

maximum food stamp allotments shall be based on 103 percent of the cost

of the Thrifty Food Plan (TFP) for the four-person reference family for

the preceding June, rounded to the nearest lower dollar increment.

Section 804 of the PRWORA amends section 3(o) of the Act by

providing that on October 1, 1996, and each October 1 thereafter, the

Department shall adjust the cost of the maximum allotment to reflect

the cost of the Thrifty Food Plan in the preceding June, and round the

result to the nearest lower dollar increment for each household size,

except that on October 1, 1996, the Sectretary may not reduce the cost

of the maximum allotment in effect on September 30, 1996.

Accordingly, this proposed rule would amend 7 CFR 273.10(e)(4)(ii)

to provide that effective October 1, 1996, the maximum food stamp

allotments shall be based on 100% of the cost of the TFP, as defined in

section 271.2, for the preceding June, rounded to the nearest lower

dollar increment, except that on October 1, 1996, the allotments may

not fall below those in effect on September 30, 1996.

In addition, the Department is proposing to remove 7 CFR

273.10(e)(4)(ii)(A) through (F) as these paragraphs, which provide for

the adjustment of the TFP for the years 1983 through 1995, are

outdated.

Conforming Amendments

Aid to Families with Dependent Children: The current food stamp

regulations contain the terms, ``Aid to Families with Dependent

Children,'' ``AFDC,'' and ``Aid to Families with Dependent Children

(AFDC).'' The PRWORA block granted this program to the States and

renamed it the Temporary Assistance for Needy Families (TANF) program.

Therefore, these terms are obsolete. Section 109 of the PRWORA made

conforming amendments to the Food Stamp Act by replacing those terms

with a reference to assistance under a State program funded under part

A of title IV of the Social Security Act.

Accordingly, this rule proposes to amend Subchapter C by replacing

the words ``Aid to Families with Dependent Children'' with ``Temporary

Assistance for Needy Families'', by replacing ``AFDC'' with ``TANF'',

and by replacing ``Aid to Families with Dependent Children (AFDC)''

with the phrase ``Temporary Assistance for Needy Families (TANF)''.

Child support payments: As required by section 5 of the Act prior

to the PRWORA, the current regulations at 7 CFR 273.9(c)(12) provide

that the State agency has the option to exclude from unearned income,

up to $50 monthly of title IV-D child support payments in cases where

such payments are received by the households from the title IV-D

support agency responsible for collecting such child support payments

on behalf of AFDC recipients. The exclusion must be uniformly applied

to all affected households. Section 109 of the PRWORA amends section 5

of the Act by removing this exclusion. This rule proposes to remove 7

CFR 273.9(c)(12) and renumber (c)(13) through (c)(17) accordingly.

As required by section 5 of the Act prior to the PRWORA, current

regulations at 7 CFR 276.2(e)(1) provide that the State agency shall be

liable to FCS for the increased dollar value of coupon allotments

resulting from providing households with an income exclusion for child

support payments as described in section 273.9(c)(12). Section 109 of

the PRWORA amends section 5 of the Act by removing the payback.

Accordingly, this rule would remove 7 CFR 276.2(e) in its entirety.

Implementation

State welfare agencies have been instructed through agency

directive to implement the provisions of the PRWORA without waiting for

formal regulations. Sections 803 (Treatment of Children Living at

Home), 805 (Definition of Homeless), and 838 (Expedited Service) were

required to be implemented as of August 22, 1996. Sections 804

(Adjustment of the Thrifty Food Plan) and 810 (Vehicle Allowance) were

required to be implemented as of October 1, 1996. Section 809 (Excess

Shelter Cap) required no change until January 1, 1997. Sections 809

(Standard Deduction), 826 (Minimum Allotment), and 109 (Conforming

Amendments) required no immediate action by the State agencies. The

Department is proposing that the changes in this rule be effective and

must be implemented the first day of the month 60 days from date of

publication of the final rule. State agencies shall implement the

provisions no later than the required implementation date. State

agencies would be required to adjust the cases of ongoing households at

the next recertification, at household request, or when the case is

next reviewed, whichever comes first. If implementation of the above

Act or this rule is delayed, benefits shall be restored, as

appropriate, in accordance with the Food Stamp Act. Any variances

resulting from implementation of the provisions of the final rule would

be excluded from error analysis for 120 days from the first day of the

month 60 days from date of publication of the final rule.

List of Subjects

7 CFR Part 271

Administrative practice and procedure, Food stamps, Grant

programs--social programs.

7 CFR Part 273

Administrative practice and procedures, Aliens, Claims, Food

stamps, Fraud, Grant programs-social programs, Penalties, Reporting and

recordkeeping requirements, Social Security, Students.

7 CFR Part 276

Administrative practice and procedure, Food stamps, Reporting and

recordkeeping requirements.

Accordingly, 7 CFR chapter II, subchapter C, and parts 271, 273,

276 are proposed to be amended as follows:

SUBCHAPTER C--FOOD STAMP AND FOOD DISTRIBUTION PROGRAM--[AMENDED]

1. In Subchapter C:

a. The words ``Aid to Families with Dependent Children'' are

removed wherever they appear and the words ``Temporary Assistance for

Needy Families'' are added in their place.

[[Page 37459]]

b. The references to ``AFDC'' are removed wherever they appear and

``TANF'' is added in their place.

c. The references to ``Aid to Families with Dependent Children

(AFDC)'' are removed wherever they appear, and the words ``Temporary

Assistance for Needy Families (TANF)'' are added in their place.

2. The authority citation for parts 271, 273, and 276 is revised to

read as follows:

Authority: 7 U.S.C. 2011-2036.

PART 271--GENERAL INFORMATION AND DEFINITIONS

Sec. 271.2 [Amended]

3. In Sec. 271.2:

a. Paragraph (3) of the definition of ``Homeless individual'' is

amended by adding the words ``for not more than 90 days'' after the

word ``accommodation''.

b. The definition of ``Minimum benefit'' is amended by removing all

text after the word ``benefit'' in the second sentence and adding in

its place ``shall be $10.''

c. The definition of ``Spouse'' is removed.

PART 273--CERTIFICATION OF ELIGIBLE HOUSEHOLDS

4. In Sec. 273.1, paragraphs (a), (b), (c) and (e) are revised to

read as follows:

Sec. 273.1 Household concept.

(a) General household definition. A household is composed of one of

the following individuals or groups of individuals, unless otherwise

specified in paragraph (b) of this section:

(1) An individual living alone;

(2) An individual living with others, but customarily purchasing

food and preparing meals for home consumption separate and apart from

others; or

(3) A group of individuals who live together and customarily

purchase food and prepare meals together for home consumption.

(b) Special household requirements. (1) Required household

combinations. The following individuals who live with others shall be

considered as customarily purchasing food and preparing meals with the

others, even if they do not do so, and thus must be included in the

same household, unless otherwise specified.

(i) Spouses;

(ii) A child under 22 years of age who is living with his or her

natural or adoptive parent(s) or step-parent(s); and

(iii) A child (other than a foster child) under 18 years of age who

lives with and is under the parental control of a household member

other than his or her parent. A child shall be considered to be under

parental control for purposes of this provision if he or she is

financially or otherwise dependent on a member of the household.

(2) Elderly and disabled persons. Notwithstanding the provisions of

paragraph (a) of this section, an otherwise eligible member of a

household who is 60 years of age or older and is unable to purchase and

prepare meals because he or she suffers from a disability considered

permanent under the Social Security Act or a non disease-related,

severe, permanent disability may be considered, together with his or

her spouse (if living there), a separate household from the others with

whom the individual lives. Separate household status under this

provision shall not be granted when the income of the others with whom

the elderly disabled individual resides (excluding the income of the

elderly and disabled individual and his or her spouse) exceeds 165

percent of the poverty line.

(3) Boarders. (i) Residents of a commercial boarding house,

regardless of the number of residents, are not eligible to participate

in the Program. A commercial boarding house is an establishment

licensed as an enterprise that offers meals and lodging for

compensation. In project areas without licensing requirements, a

commercial boarding house is a commercial establishment which offers

meals and lodging for compensation with the intent of making a profit.

(ii) All other individuals or groups of individuals paying a

reasonable amount for meals or meals and lodging shall be considered

boarders and are not eligible to participate in the Program

independently of the household providing the board. Such individuals or

groups of individuals may participate, along with a spouse or children

living with them, as members of the household providing the boarder

services, only at the request of the household providing the boarder

service. An individual paying less than a reasonable amount for board

shall not be considered a boarder but shall be considered, along with a

spouse or children living with them, as a member of the household

providing the board.

(A) For individuals whose board arrangement is for more than two

meals per day, ``reasonable compensation'' shall be an amount that

equals or exceeds the maximum food stamp allotment for the appropriate

size of the boarder household.

(B) For individuals whose board arrangement is for two meals or

less per day, ``reasonable compensation'' shall be an amount that

equals or exceeds two-thirds of the maximum food stamp allotment for

the appropriate size of the boarder household.

(iii) Boarders shall not be considered to be residents of an

institution for the purposes of paragraph (b)(7)(vii) of this section.

(4) Foster care individuals. Individuals placed in the home of

relatives or other individuals or families by a Federal, State, or

local governmental foster care program shall be considered to be

boarders and cannot participate in the Program independently of the

household providing the foster care services. Such foster care

individuals may participate, along with a spouse or children living

with them, as members of the household providing the foster care

services, only at the request of the household providing the foster

care.

(5) Roomers. Individuals to whom a household furnishes lodging for

compensation, but not meals, may participate as separate households.

Persons described in paragraph (b)(1) of this section shall not be

considered roomers.

(6) Live-in attendants. Live-in attendants may participate as a

separate household. Persons described in paragraph (b)(1) of this

section shall not be considered live-in attendants.

(7) Ineligible household members. The following persons are not

eligible to participate as separate households or as a member of any

household:

(i) Ineligible aliens and students as specified in Sec. 273.4 and

Sec. 273.5, respectively;

(ii) SSI recipients in ``cash-out'' States as specified in

Sec. 273.20;

(iii) Individuals disqualified for noncompliance with the work

requirements of Sec. 273.7;

(iv) Individuals against whom a sanction was imposed for failure to

comply with a workfare requirement as specified in Sec. 273.22;

(v) Individuals disqualified for failure to provide an SSN as

specified in Sec. 273.6;

(vi) Individuals disqualified for an intentional Program violation

as specified in Sec. 273.16; and

(vii) Residents of an institution, with some exceptions.

Individuals shall be considered residents of an institution when the

institution provides them with the majority of their meals (over 50

percent of three meals daily) as part of the institution's normal

services. Exceptions to this requirement include only the individuals

listed in paragraphs (b)(7) (vii)(A) through (b)(7)(vii)(E) of this

section. The individuals listed in paragraphs (b)(7)(vii)(A) through

(b)(7)(vii)(E) can

[[Page 37460]]

participate in the Program and shall be treated as separate households

from the others with whom they reside pursuant to the mandatory

household combination requirements of paragraph (b)(1) of this section,

unless otherwise stated:

(A) Individuals who are residents of federally subsidized housing

for the elderly;

(B) Individuals who are narcotic addicts or alcoholics who reside

at a facility or treatment center for the purpose of regular

participation in a drug or alcohol treatment and rehabilitation

program, and their children but not the spouse of such persons who live

with them at the treatment center or facility;

(C) Individuals who are disabled or blind who are residents of

group living arrangements;

(D) Individual women or women with their children who are

temporarily residing in a shelter for battered women and children; and

(E) Individuals who are residents of public or private nonprofit

shelters for homeless persons.

(c) Unregulated situations. For situations that are not clearly

addressed by the provisions of paragraphs (a) and (b) of this section,

the State agency may apply its own policy for determining when an

individual is a separate household or a member of another household if

the policy is applied consistently throughout the State.

* * * * *

(e) Strikers. Households with a striking member are not eligible to

participate in the Program, unless the household was eligible for

benefits the day prior to the strike and is otherwise eligible at the

time of application. A striker shall be anyone involved in a strike or

concerted stoppage of work by employees (including a stoppage by reason

of the expiration of a collective-bargaining agreement) and any

concerted slowdown or other concerted interruption of operations by

employees. Any employee affected by a lockout, however, shall not be

deemed to be a striker. Further, an individual who goes on strike who

is exempt from work registration, in accordance with Sec. 273.7(b), the

day prior to the strike, other than those exempt solely on the grounds

that they are employed, shall not be deemed to be a striker.

(1) Pre-strike eligibility shall be determined by considering the

day prior to the strike as the day of application and assuming the

strike did not occur.

(2) Eligibility at the time of application shall be determined by

comparing the striking member's income before the strike to the

striker's current income and adding the higher of the two to the

current income of non-striking members during the month of application.

If the household is eligible, the higher income figure shall also be

used in determining the household's benefits.

* * * * *

Sec. 273.2 [Amended]

5. In Sec. 273.2:

a. Paragraph (i)(1)(iii) is removed.

b. Paragraph (i)(1) (iv) is redesignated as paragraph (i)(1)(iii).

c. Paragraph (i)(3)(i) is amended by removing the word ``fifth''

wherever it appears and adding the word ``seventh'' in its place.

d. Paragraph (i)(3)(ii) is amended by removing the words ``5

calendar days'' and adding the words ``7 calendar days'' in its place.

6. In Sec. 273.8:

a. Paragraph (c)(2) is amended by removing the regulatory reference

to ``paragraph (h)'' and adding in its place a regulatory reference to

``paragraph (g)''.

b. Paragraph (e)(3) is revised.

c. Paragraph (e)(11) is amended by removing the second sentence of

the introductory text and by removing paragraphs (e)(11)(i) through

(e)(11)(ix).

d. Paragraph (e)(16) is amended by removing the regulatory

reference to ``paragraphs (h)(1)(i), (h)(1)(ii) or (h)(1)(v)'' and

adding in its place the regulatory reference to ``paragraphs

(e)(3)(i)(A), (e)(3)(i)(B) or (e)(3)(i)(E)'', respectively.

e. Paragraph (e)(18) is amended by removing the regulatory

reference to ``paragraph (h)'' and adding in its place a regulatory

reference to ``paragraph (g)''.

f. Paragraph (g) is revised.

g. Paragraphs (h) and (j) are removed and paragraph (i) is

redesignated as paragraph (h).

The revisions read as follows:

Sec. 273.8 Resource eligibility standards.

* * * * *

(e) Exclusions from resources. * * *

(3)(i) Licensed vehicles that meet the following conditions:

(A) Used for income-producing purposes such as, but not limited to,

a taxi, truck, or fishing boat, or a vehicle used for deliveries, to

call on customers, or required by the terms of employment. Licensed

vehicles that have previously been used by a self-employed household

member engaged in farming but are no longer used over 50 percent of the

time in farming because the household member has terminated his/her

self-employment from farming shall continue to be excluded as a

resource for one year from the date the household member terminated

his/her self-employment farming;

(B) Annually producing income consistent with its fair market

value, even if used only on a seasonal basis;

(C) Necessary for long-distance travel, other than daily commuting,

that is essential to the employment of a household member (or

ineligible alien or disqualified person whose resources are being

considered available to the household), for example, the vehicle of a

traveling sales person or a migrant farm worker following the work

stream;

(D) Used as the household's home and, therefore, excluded under

paragraph (e)(1) of this section;

(E) Necessary to transport a physically disabled household member

(or ineligible alien or disqualified person whose resources are being

considered available to the household) regardless of the purpose of

such transportation (limited to one vehicle per physically disabled

household member). A vehicle shall be considered necessary for the

transportation of a physically disabled household member if the vehicle

is specially equipped to meet the special needs of the disabled person

or if the vehicle is a special type of vehicle that makes it possible

to transport the disabled person. The vehicle need not have special

equipment or be used primarily by or for the transportation of the

physically disabled household member; or

(F) Necessary to carry fuel for heating or water for home use when

such transported fuel or water is anticipated to be the primary source

of fuel or water for the household during the certification period.

Households shall receive this resource exclusion without having to meet

any additional tests concerning the nature, capabilities, or other uses

of the vehicle. Households shall not be required to furnish

documentation, as mandated by Sec. 273.2(f)(4), unless the exclusion of

the vehicle is questionable. If the basis for exclusion of the vehicle

is questionable, the State agency may require documentation from the

household, in accordance with Sec. 273.2(f)(4).

(ii) On those Indian reservations that do not require vehicles

driven by tribal members to be licensed, such vehicles shall be treated

as licensed vehicles for the purpose of this exclusion.

(iii) The exclusion in paragraphs (e)(3)(i)(A) through (e)(3)(i)(F)

of this section will apply when the vehicle is not in use because of

temporary unemployment, such as when a taxi driver is ill and cannot

work, or when

[[Page 37461]]

a fishing boat is frozen in and cannot be used.

* * * * *

(g) Determining the value of non-excluded vehicles. (1) The State

agency shall individually evaluate the fair market value of each

licensed vehicle that is not excluded under paragraph (e)(3) of this

section. That portion of the fair market value that exceeds $4,650

beginning October 1, 1996, shall be counted in full toward the

household's resource level, regardless of any encumbrances on the

vehicle. Such licensed vehicles as well as all unlicensed vehicles

shall also be evaluated for their equity value (fair market value less

encumbrances), unless specifically exempt from the equity value test.

If the vehicle has a countable fair market value of more than $4,650

after October 1, 1996, and also has a countable equity value, only the

greater of the two amounts shall be counted as a resource. Only the

following vehicles are exempt from the equity value test:

(i) Vehicles excluded under paragraph (e)(3)(i) of this section;

(ii) One licensed vehicle per household; and

(iii) Any other vehicle used to transport household members to and

from employment (including times during temporary periods of

unemployment), or to and from training or education that is preparatory

to employment, or to seek employment in compliance with the employment

and training criteria specified in Sec. 273.7.

(2) State agencies shall be responsible for establishing

methodologies for determining the fair market value of vehicles. In

establishing such methodologies, the State agency shall not increase

the basic value of a vehicle by adding the value of low mileage or

other factors such as optional equipment or special apparatus for the

handicapped. Households which claim that the State agency's

determination of the value of its vehicle(s) does not apply shall be

given the opportunity to acquire verification of the true value of the

vehicle from a reliable source.

* * * * *

7. In Sec. 273.9:

a. Paragraph (c)(12) is removed and paragraphs (c)(13), (c)(14),

(c)(15), (c)(16) and (c)(17) are redesignated as paragraphs (c)(12),

(c)(13), (c)(14), (c)(15) and (c)(16) respectively.

b. Paragraphs (d)(7) and (d)(8) are revised to read as follows:

Sec. 273.9 Income and deductions.

* * * * *

(d) * * *

(7) Adjustment of standard deduction. Effective October 1, 1996,

for each household in the 48 contiguous States and the District of

Columbia, Alaska, Hawaii, Guam and the Virgin Islands of the United

States, the standard deduction shall be $134, $229, $189, $269, and

$118, respectively.

(8) Adjustment of shelter deduction. In the case of a household

that does not contain an elderly or disabled individual, in the 48

contiguous States and the District of Columbia, Alaska, Hawaii, Guam

and the Virgin Islands of the United States, the excess shelter expense

deduction shall not exceed

(i) For the period beginning August 22, 1996, and ending on

December 31, 1996, $247, $429, $353, $300, and $182 per month,

respectively;

(ii) For the period beginning on January 1, 1997, and ending on

September 30, 1998, $250, $434, $357, $304, and $184 per month,

respectively;

(iii) For the period beginning on October 1, 1998 and ending on

September 30, 2000, $275, $478, $393, $334, and $203 per month,

respectively; and

(iv) For the period beginning on October 1, 2000 and thereafter,

$300, $521, $429, $364, and $221 per month, respectively.

* * * * *

8. In Sec. 273.10 paragraph (e)(4)(ii) is revised to read as

follows.

Sec. 273.10 Determining household eligibility and benefit levels.

* * * * *

(e) Calculating net income and benefit levels. * * *

(4) Thrifty Food Plan (TFP) and Maximum Food Stamp Allotments. * *

*

(ii) Adjustment. Effective October 1, 1996, the maximum food stamp

allotments shall be based on 100% of the cost of the TFP as defined in

section 271.2 for the preceding June, rounded to the nearest lower

dollar increment, except that on October 1, 1996, the allotments may

not fall below those in effect on September 30, 1996.

* * * * *

Sec. 276.2 [Amended]

9. In Sec. 276.2, paragraph (e) is removed.

Dated: June 29, 1999.

Shirley R. Watkins,

Under Secretary, Food, Nutrition, and Consumer Services.

[FR Doc. 99-17445 Filed 7-9-99; 8:45 am]

BILLING CODE 3410-30-U